Mandatory HMRC Registration for Conveyancers as Tax Advisers – Joint statement from SLC and BLG

The Society of Licensed Conveyancers (SLC) and the Bold Legal Group (BLG) remain extremely concerned about the lack of clear guidance from HMRC available to conveyancers regarding the requirement to register as tax advisers, despite repeated requests for clarification.

The Government has confirmed that the new rules will still come into force in May, with mandatory registration beginning on 18 May.

Under the draft legislation, conveyancing firms submitting Land Transaction Returns for clients fall within the scope of mandatory registration as tax advisers.

Unfortunately, due to the ongoing uncertainty and limited official guidance, neither SLC nor BLG is currently able fully to answer its members’ questions. We are, however, receiving a high volume of queries from firms who believe that outsourcing SDLT work will remove the obligation to register as tax advisers.

At this stage, both organisations do not believe this assumption is correct.

• Even if SDLT work is outsourced, many firms still handle the payment to HMRC – which maycontinue to be treated as tax adviser activity under the new rules
• If the outsourced provider submits the payment instead, this presents its own risks, and itremains unclear:
• whether such providers are themselves required to be or are already registered as taxadvisers, and
• whether using them would exempt the instructing firm from registration

Members should also be aware that if you outsource SDLT work to a specialist, the specialist typically acts as your agent, meaning you remain the principal and may still be held liable for any errors or defaults.

Any decision to outsource should also take into account the best interests of clients, the need to comply with the requirements of lenders and (for those covered by the Conveyancing Quality Scheme) the CQS requirements.

We fully appreciate the concern and uncertainty these developments are causing. We have raised these issues directly with Ministers and are actively seeking urgent clarification on behalf of all members.

In addition to the foregoing, our interpretation of the requirements of the UK Finance Lenders Handbook provisions 10.4, 10.5 and 10.6 is that conveyancers acting for mortgage lenders will need to register as Tax Advisors. We are seeking clarification from UK Finance that this is the position. Further updates will be issued as soon as clear guidance is available.

Kindly shared by The Society of Licensed Conveyancers (SLC)